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CNN LIVE EVENT/SPECIAL

Obama, Huckabee Win Iowa Caucuses

Aired January 3, 2008 - 23:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SOLEDAD O'BRIEN, CNN ANCHOR: I find that number so fascinating, because, if you -- you crunch those numbers, you think, those women, those young women, were 3 years old to, what, 15 years old when Bill Clinton first came into office.
Maybe the Bill Clinton effect doesn't really matter to them. That could be one issue to explore as they go forward, certainly, I think.

(CROSSTALK)

O'BRIEN: How about race?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Race is important.

Iowa is a state that is not -- where the voters, the Democratic voters, were 93 percent white, just 4 percent black. Why is that important? Because Barack Obama has won an overwhelmingly white state. New Hampshire comes next, another overwhelmingly white state.

If he wins two overwhelmingly white states, the effect on African-American voters in the next state -- that's South Carolina...

O'BRIEN: Who want to back a winner.

SCHNEIDER: Who want to back a winner -- is going to be fantastic.

They are not going to stop -- even though many of them Hillary Clinton and have shown an inclination to vote for her, I don't think they are going to stop what a -- the first -- the man who could be the first black president of the United States. So, this could really start something.

O'BRIEN: It's going to be interesting to watch.

All right, let's talk a little bit about Mike Huckabee and his victory. You know, we heard him say in his remarks, now it's on to New Hampshire.

OK, so obstacles and opportunities for him as he heads on to New Hampshire. Obviously, born-again, evangelicals, clearly, they supported him. And it was that support that really, really helped.

SCHNEIDER: That's right. This state was -- 60 percent of the voters in the Republican primary were born-again or evangelical Christians. That may not be -- it certainly will not be the case in New Hampshire. That's a state which is far less religious and less evangelical than Iowa.

O'BRIEN: File that under obstacle for Mike Huckabee.

SCHNEIDER: Yes.

O'BRIEN: And if you drill down a little bit further on -- for people who said, religion matters to them a lot, and you break down those numbers, that top -- you know, for people for whom it mattered a great deal, that was Huckabee's voting bloc.

SCHNEIDER: That's right.

You remember age for Obama? The same thing happens with religious beliefs for Huckabee voters. Those who say religious beliefs of the candidates matter a great deal, 56 percent for Huckabee. Those who say it didn't matter much or not at all, Huckabee's support was really negligible.

Well, you're going to be coming to states now where religion is far less important than it is among Iowa Republicans.

O'BRIEN: And, in fact, states where people are overwhelmingly not born again and not evangelical. So, how did that voting bloc do? How was the turnout for Huckabee, looking at that more closely?

SCHNEIDER: This is a danger sign for Mike Huckabee going forward into New Hampshire and other states.

These are voters who are not born again or evangelical, a minority among Iowa Republicans. But look at this. They voted 33 percent for Mitt Romney. McCain came in second. Mike Huckabee's support among non-born-again or evangelical Republican voters, just 14 percent.

O'BRIEN: Third place for him.

SCHNEIDER: Third place, 14 percent. That's a very poor showing among those voters who are not evangelical. They were small in -- relatively small in Iowa. They're going to get much bigger in states like California, Florida, and New York.

O'BRIEN: So, the takeaway for Mike Huckabee as he moves forward, looking at a poll like this, what does he say?

SCHNEIDER: He has to appeal to the non-evangelical Republican voters, to those who do not put religion in first place. He's got to broaden his appeal beyond his religious base, if he's going to win this nomination.

O'BRIEN: Right.

Bill, thank you very much.

Let's throw it right back to Wolf. And, Wolf, as you heard, Mike Huckabee said, it's on to New Hampshire. He's clearly got a little work to do.

WOLF BLITZER, CNN ANCHOR: Fascinating material, guys. Thanks very much.

And I just want to let our viewers know that there were 220,000 Democrats who showed up at these caucuses -- that's a record -- and 114,000 Republicans or so who showed up. I think that's a record for the Republicans. A lot more Democrats participated in these caucuses in Iowa, though, than Republicans.

Take a look at this picture you're seeing right now. There he is, the winner of the Democratic caucuses in -- in Iowa, Barack Obama, walking in with his daughters, Michelle Obama, his wife. He's getting ready to address his supporters.

They are so pumped up. They are so excited over what happened tonight. Barack Obama, a young man, in his mid-40s, has now won the Iowa caucuses. And he's about to speak to supporters and get ready for the next contest in five days in New Hampshire, where the polls show it's very, very tight right now.

We don't know what the impact, the bounce will be from Iowa on New Hampshire. We do know that his supporters are very, very pumped up and excited as a result of tonight's dramatic win in Iowa.

I should point out to our viewers he's had some trouble with his voice over the past day or two. He's been working really hard. It's been really cold out there. So, if his voice sounds a little bit weak tonight, you will know he's been losing some of that voice, not necessarily a great time for that to happen. But I'm sure he will overcome that problem with the whole notion of this victory -- Barack Obama with his supporters.

And, as you see that banner behind him, "Change we can believe in," that's been his theme from day one. He's focused in on change, not necessarily experience. But that theme of change has clearly paid off in Iowa for him tonight.

Right now, with 98 percent of the vote officially counted, he's got 38 percent to John Edwards' 30, Hillary Clinton's 29 percent.

Barack Obama is about to speak in -- and we're going to want to listen in very, very closely to hear what he has to say, just as we listened closely to Mike Huckabee, who's the Republican winner.

Let's get ready to listen to the junior senator from Illinois, Barack Obama.

(CHEERING AND APPLAUSE)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

(CHEERING AND APPLAUSE)

OBAMA: Thank you. Thank you. Thank you. Thank you, Iowa.

You know, they said -- they said -- they said this day would never come.

(CHEERING AND APPLAUSE)

OBAMA: They said our sights were set too high.

(CHEERING AND APPLAUSE)

OBAMA: They said this country was too divided, too disillusioned to ever come together around a common purpose. But, on this January night, at this defining moment in history, you have done what the cynics said we couldn't do.

(CHEERING AND APPLAUSE)

OBAMA: You have done what the state of New Hampshire can do in five days.

(CHEERING AND APPLAUSE)

OBAMA: You have done what America can do in this new year, 2008.

(CHEERING AND APPLAUSE)

OBAMA: In lines that stretched around schools and churches in small towns and in big cities, you came together, as Democrats, Republicans, and independents, to stand up and say that we are one nation, we are one people, and our time for change has come.

(CHEERING AND APPLAUSE)

CROWD: Obama! Obama! Obama! Obama!

OBAMA: You said the time has come to move beyond the bitterness and pettiness and anger that's consumed Washington...

(CHEERING AND APPLAUSE)

OBAMA: ... to end the political strategy that has been all about division, and instead make it about addition, to build a coalition for change that stretches through red states and blue states...

(CHEERING AND APPLAUSE)

OBAMA: ... because that's how we will win in November, and that's how we will finally meet the challenges that we face as a nation.

(CHEERING AND APPLAUSE)

OBAMA: We are choosing hope over fear.

(CHEERING AND APPLAUSE)

OBAMA: We're choosing unity over division and sending a powerful message that change is coming to America.

(CHEERING AND APPLAUSE)

CROWD: USA! USA! USA! USA!

OBAMA: You said the time has come to tell the lobbyists, who think their money and their influence speak louder than our voices, that they don't own this government. We do. And we are here to take it back.

(CHEERING AND APPLAUSE)

OBAMA: The time has come for a president who will be honest about the choices and the challenges we face, who will listen to you, and learn from you, even when we disagree, who won't just tell you what you want to hear, but what you need to know.

(CHEERING AND APPLAUSE)

OBAMA: And, in New Hampshire, if you give me the same chance that Iowa did tonight, I will be that president for America.

(CHEERING AND APPLAUSE)

CROWD: Obama! Obama! Obama! Obama! Obama! Obama! Obama! Obama! Obama! Obama!

(CHEERING AND APPLAUSE)

OBAMA: I will be a president who finally makes health care affordable and available to every single American, the same way I expanded health care in Illinois, by...

(CHEERING AND APPLAUSE)

OBAMA: ... by bringing Democrats and Republicans together to get the job done.

I will be a president who ends the tax breaks for companies that ship our jobs overseas, and put a middle-class tax cuts into the pockets of working Americans, who deserve it.

(CHEERING AND APPLAUSE)

OBAMA: I will be a president who harnesses the ingenuity of farmers and scientists and entrepreneurs to free this nation from the tyranny of oil, once and for all.

(CHEERING AND APPLAUSE)

OBAMA: And I will be a president who ends this war in Iraq and finally brings our troops home...

(CHEERING AND APPLAUSE)

OBAMA: ... who restores our moral standing, who understands that 9/11 is not a way to scare up votes, but a challenge that should unite America and the world against the common threats of the 21st century...

(CHEERING AND APPLAUSE)

OBAMA: ... common threats of terrorism and nuclear weapons, climate change and poverty, genocide and disease.

Tonight, we are one step closer to that vision of America because of what you did here in Iowa.

And, so, I would especially like to thank the organizers, and the precinct captains, the volunteers...

(CHEERING AND APPLAUSE)

OBAMA: ... and the staff, who made this all possible.

And while I'm at it on thank-yous, I think it makes sense for me to thank the love of my life, the rock of the Obama family, the closer on the campaign trail.

Give it up for Michelle Obama.

(CHEERING AND APPLAUSE)

OBAMA: I know you didn't do this for me. You did this -- you did this because you believed so deeply in the most American of ideas, that, in the face of impossible odds, people who love this country can change it.

(CHEERING AND APPLAUSE)

OBAMA: I know this. I know this because, while I may be standing here tonight, I will never forget that my journey began on the streets of Chicago doing what so many of you have done for this campaign and all the campaigns here in Iowa, organizing and working and fighting to make people's lives just a little bit better.

(CHEERING AND APPLAUSE)

OBAMA: I know how hard it is. It comes with little sleep, little pay and a lot of sacrifice. There are days of disappointment.

But, sometimes, just sometimes, there are nights like this...

(CHEERING AND APPLAUSE)

OBAMA: ... a night -- a night that, years from now, when we have made the changes we believe in, when more families can afford to see a doctor, when our children -- when Malia and Sasha and your children inherit a planet that's a little cleaner and safer, when the world sees America differently, and America sees itself as a nation less divided and more united, you will be able to look back with pride and say that this was the moment when it all began.

(CHEERING AND APPLAUSE)

OBAMA: This was the moment when the improbable beat what Washington always said was inevitable. This was the moment when we tore down barriers that have divided us for too long, when we rallied people of all parties and ages to a common cause; when we finally gave Americans who have never participated in politics a reason to stand up and to do so.

(CHEERING AND APPLAUSE)

OBAMA: This was the moment when we finally beat back the politics of fear and doubts and cynicism, the politics where we tear each other down, instead of lifting this country up. This was the moment.

(CHEERING AND APPLAUSE)

OBAMA: Years from now, you will look back and you will say that this was the moment. This was the place where America remembered what it means to hope.

For many months, we have been teased, even derided, for talking about hope. But we always knew that hope is not blind optimism. It's not ignoring the enormity of the tasks ahead or the roadblocks that stand in our path. It's not sitting on the sidelines or shirking from a fight. Hope is that thing inside us that insists, despite all the evidence to the contrary, that something better awaits us if we have the courage to reach for it and to work for it and to fight for it.

(CHEERING AND APPLAUSE)

OBAMA: Hope is what I saw in the eyes of the young woman in Cedar Rapids who works the night shift after a full day of college, and still can't afford health care for a sister who's ill, a young woman who still believes that this country will give her the chance to live out her dreams.

Hope is what I heard in the voice of the New Hampshire woman who told me that she hasn't been able to breathe since her nephew left for Iraq, who still goes to bed each night praying for his safe return.

Hope is what led a band of colonists to rise up against an empire, what led the greatest of generations to free a continent and heal a nation, what led young women and young men to sit at lunch counters and brave fire hoses and march through Selma and Montgomery for freedom's cause.

(CHEERING AND APPLAUSE)

OBAMA: Hope -- hope is what led me here today, with a father from Kenya, a mother from Kansas, and a story that could only happen in the United States of America.

(CHEERING AND APPLAUSE) OBAMA: Hope is the bedrock of this nation, the belief that our destiny will not be written for us, but by us, by all those men and women who are not content to settle for the world as it is, who have the courage to remake the world as it should be.

That is what we started here in Iowa, and that is the message we can now carry to New Hampshire and beyond...

(CHEERING AND APPLAUSE)

OBAMA: ... the same message we had when we were up and when we were down, the one that can change this country, brick by brick, block by block, callous hand by callous hand, that, together, ordinary people can do extraordinary things, because we are not a collection of red states and blue states. We are the United States of America.

(CHEERING AND APPLAUSE)

OBAMA: And, in this moment, in this election, we are ready to believe again.

Thank you, Iowa.

BLITZER: All right, so there it is. Barack Obama, he has emerged the winner of the Democratic caucuses in Iowa, speaking to his supporters, now getting ready to move on to the next battle. That would be in New Hampshire -- Barack Obama decisively winning among the three front-runners in Iowa, John Edwards, Hillary Clinton.

Right now with 98 percent -- 98 percent -- of the Democratic precincts officially reporting, Obama has 38 percent -- he's the winner -- John Edwards 30 percent, Hillary Clinton 29 percent. If this stays the way it is, she will come in third in Iowa.

We have got some other news we want to report right now.

Joe Biden, the chairman of the Senate Foreign Relations Committee, will drop out as a Democratic presidential candidate, CNN has now confirmed.

Earlier, we reported that Chris Dodd, the senator from Connecticut, also has decided to drop out of this race, both of these U.S. senators not doing well at all in Iowa. They pinned a lot of their hopes on doing well in that state. They didn't do well. And, as a result, both Joe Biden and Chris Dodd will drop out.

We're still waiting to hear from some of the other candidates.

By the way, at the top of the hour, midnight Eastern time, there will be a special "LARRY KING LIVE." And Larry is going to be speaking to a lot of these presidential candidates, among them, Mike Huckabee. The winner of the Republican caucuses, will be joining Larry. John Edwards will be joining Larry as well.

Rudy Giuliani, who really didn't do well in Iowa at all, he will be joining Larry King tonight -- a special "LARRY KING LIVE" at midnight, coming up right after our election coverage.

And, remember, you can go to CNNPolitics.com and see all the results county by county by county, Democrats and Republicans. You can get running analysis from our own Bill Schneider. Go to CNNPolitics.com for the inside story of what is going on.

This is a very dramatic night, as I have been saying, for the Democrats and the Republicans, a big disappointment for Hillary Clinton, a big disappointment for Mitt Romney.

Anderson Cooper is watching all of this with the best political team on television -- Anderson.

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": I want to introduce two members who have just joined us, Roland Martin, CNN contributor, as well as Carl Bernstein, CNN contributor.

Roland, you have been watching Barack Obama's career for a long time from your perch in Illinois.

What do you make of tonight?

ROLAND MARTIN, CNN CONTRIBUTOR: One of his campaign folks said, we rocked the political establishment.

Here's someone who, 11 months ago, people said had no chance. He had a funny name. He's a junior senator, only served two years in the U.S. Senate, eight years in the state legislature. All of a sudden, tonight, he wins Iowa.

But, also, this should be expanded. Iowa has never elected an African-American to anything. And, so, for Obama to win tonight -- this was not a close race. He beats Edwards by eight points. He beats Clinton by nine points. That is a major, major accomplishment for someone who people said was a naive guy, a young guy, running against somebody like Clinton.

COOPER: It's amazing how the style of his speaking -- you saw it in the speech tonight, a very stirring speech. He has grown a lot...

MARTIN: Absolutely.

COOPER: ... as a speaker, as a campaigner, over the last several months.

MARTIN: Well, because he has also gained more confidence. And, so, what you saw -- I mean, people -- a lot of people said, well, he doesn't perform well in debates, because, frankly, he hates debates. He thinks you that can't talk about issues in the debates in 30 seconds and 60 seconds.

And, so, what he has done is, he's begun to truly believe in himself that he can actually win. And, so, in this speech, you heard him reference Selma. You heard him reference Birmingham. He referenced, of course, his mother being from Kansas, his father being from Kenya. He brought in all these different elements, but also the backdrop. When Reverend Jackson ran in '84 and '88, he ran under the Rainbow Coalition. What you saw -- that was really a black campaign.

What you saw tonight, behind Obama, was the true rainbow coalition. You saw a multiple number of different people. That's why he is so appealing, because he is reaching out to voters across the various spectrum, as opposed to just one particular ethnic group.

COOPER: Carl Bernstein, writing the best-selling book "A Woman in Charge: The Life of Hillary Rodham Clinton," how does Hillary Clinton now go on tomorrow? We learned that Bill Clinton will be campaigning with her in New Hampshire. There had been some question about that. A third-place finish to Barack Obama is probably the worst possible outcome for her today.

CARL BERNSTEIN, CNN CONTRIBUTOR: Not just third place. Seventy percent of Democrats in Iowa voted against Hillary Clinton, not just that almost 40 voted for Obama.

And what we heard him do tonight is say, this is going to be a crusade.

She gave her stump speech. And I was watching Bill Clinton. And you could see the devastation on Bill Clinton's face tonight. They are going to have to regroup. They are going to have to come up with a different rationale for this campaign, because what we heard Obama say tonight is, this is about Republicans. This is about independents.

There's going to be a fight for the soul of the Democratic Party, not just in New Hampshire, but through all those 20 Super Tuesday states. And that fight is going to be about who can best reach out and unite the country, because Obama knows that the rap on Hillary Clinton is that she's polarizing, is that she's divisive.

And the Clintons now have to come up with a rationale that shows they are not and they can unite the country, unite the party. It's a very difficult thing to pull off, after that inspirational speech, on top of which, you know, you looked at the people behind Hillary and Bill Clinton. They were old faces.

COOPER: Madeleine Albright.

BERNSTEIN: Madeleine -- well, I don't want to say anything derisive about -- about Madeleine Albright. I mean, they were people...

(CROSSTALK)

MARTIN: They were...

(CROSSTALK)

BERNSTEIN: Exactly.

(LAUGHTER)

BERNSTEIN: And you looked at that crowd behind Obama, and you saw, oh, something is happening here.

And, if the Clintons are to stop it, they have to, one -- another thing that has been repudiated tonight is this idea of restoration of the Clintons, plural, to the White House. That was an underlying issue here. And it figures with the age breakdown that we have seen in CNN's exit and entrance polls.

So, there has to be a whole new rationale. Why is Hillary Clinton now qualified to be the president of the United States, and what does she do to unite this country?

MARTIN: Anderson, I talked to Cornell Belcher, the leader pollster for Barack Obama. And what he said is that, we also have the opportunity to expand the party.

Now, a lot of people criticized Reverend Jackson and his run, but two million new voters were brought into the party. That's how Richard Shelby won the Senate in Alabama. He was a Democrat, later become a Republican. Many other whites among the party won all across the South.

What they're saying is, wait a minute. We blew away Clinton tonight with independents. And, so, we can expand the party. Now they're saying Georgia, Tennessee, Mississippi could be in play.

And here's the other piece. Joe Reed, leader in Alabama, he said: I'm supporting Hillary Clinton because I don't believe white voters are going to support Barack Obama.

He wins in Iowa, 2.3 percent black. He goes to New Hampshire with 40 percent independents. What if he wins there? Now African- Americans in South Carolina who have been saying that, hey, we don't know about this guy, because I don't think whites are going to support him, now, all of a sudden, he has proven, guess what, they're now going to support me.

And, so, now, all of a sudden, I would not be surprised if you see a bump in South Carolina in terms of those numbers. And, so, he has the opportunity to expand the base of the Democratic Party with new votes, and not rely on traditional older voters, also labor unions. And, so, that's also a key, key point here. He made the point of bringing in new people. He was successful. And let's see what happens in New Hampshire.

COOPER: I want to bring in our other analysts, John King, Gloria Borger, David Gergen, and Suzanne Malveaux.

John, it's a point you brought up before. New Hampshire becomes essential for Hillary Clinton, because then you have South Carolina, as Roland Martin just said, and a large African-American population.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And especially coming in third in Iowa. She cannot afford to lose again. The premise of the Hillary Clinton campaign was the inevitability of her nomination. You can win in politics strategically or tactically. That speech you just heard from Obama was a brilliant strategic speech: This is the day they will remember years from now, the end of the politics of fear, the beginning of the politics of hope.

She can't beat that. So, she has to try to beat him tactically in New Hampshire. And the questions the Clinton campaign has to be asking itself is, well, how do we beat him tactically in New Hampshire when, in a state like Iowa, a caucus state, where tactics matter most, turning out your people, getting them to go through that arcane process, they got beat tactically there? They better get their act together.

And, Anderson, again -- and we have said this a lot tonight -- this is a very different compressed calendar. It is five days. It's hard to stop a bounce like he will get from tonight in five short days.

COOPER: David Gergen, you had brought up the point earlier, would Bill Clinton be campaigning for her? We now know, yes, tomorrow, he will be in New Hampshire with her. Does that surprise you?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It did surprise me.

It tells me they're putting a lot of -- all their chips on the table, because, once he campaigns on her side over the next couple of days, it's really saying, this is a referendum on my presidency as well. And if they -- and if she -- if she goes down in New Hampshire, that's a real blow for him as well.

I thought Carl Bernstein was right. There was a look of devastation on Bill Clinton's face tonight. He's proud of her, but he's also devastated.

But I do want to come back. I thought we heard not one, but two really important speeches tonight. Mike Huckabee's speech was also -- transcended the issues. It spoke not to the head, as Romney does. He spoke to the heart.

And, if it were not for all these other surrounding issues about Mike Huckabee, you would have to say, he is -- he could be a very powerful candidate within the Republican Party.

I thought Barack Obama's speech was one of the best I have ever heard from him. There were echoes of Martin Luther King in that speech, as well as, of course, echoes of his own convention speech.

But he's doing something more than that. Hillary went -- why she seemed a little plodding against him, she went to the change theme, change, change, change. He -- he went ahead of that. He said, change by unifying, by becoming one country. It was very nationalistic.

And it was -- and there was a sort of implicit message: If I can bring down the barriers between blacks and whites in this country, we can bring down the barriers between Republicans and Democrats.

COOPER: Very quickly, Gloria Borger.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, you know, Hillary was kind of emotionless. She was gracious, but she was emotionless.

Her speech essentially was: I should be president because I have the money and I have the support.

He was full of hope and energy. And it was a much more emotional speech. And I think that's the difference between those two candidates.

COOPER: We have got to take a short break.

We will be right back with more political coverage on CNN. We will be right back.

(COMMERCIAL BREAK)

BLITZER: Big night for Barack Obama and for Mike Huckabee. But remember, this is only the beginning of the process. They may have won the caucuses of their respective parties in Iowa, but they're still a long, long way to go including in five days in New Hampshire where the polls show it could be very, very different. On the Republican side, Mitt Romney facing a very stiff challenge right now from John McCain. Let's see if Huckabee can translate that support in Iowa into New Hampshire. Here's what happened tonight in Iowa. Take a look at this, 86 percent of the Republican precincts in the State of Iowa have now officially reported. Huckabee with 34 percent, he's the winner, Romney 25 percent. There's a battle underway for third place in Iowa between McCain and Thompson, Fred Thompson the former senator from Tennessee, they both have 13 percent. We heard Mike Huckabee's speech earlier to his supporters, it was very passionate and he spoke about what he needs to do right now.

While he was speaking, Mitt Romney was speaking as well. And he spoke to his supporters and we have a little excerpt we want to play for you right now.

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: We have come a long way in this last year, you think about where we started. An unknown governor from the bluest state in America, comes to Iowa running against, well at that time three household names, Rudy Giuliani, John McCain, Fred Thompson and somehow tonight, we beat all of them.

We just got to make sure we keep that up state after state after state.

Well we won the silver.

And congratulations to Governor Huckabee for winning the gold, nice job. But, you know, just as Jan Janssen (ph) pointed out, you win the silver in one event, doesn't mean you're not going to come back and win the gold in the final event. And that, we're going to do.

(END VIDEO CLIP)

BLITZER: All right, that was Mitt Romney. We'll see what kind of a job he does in New Hampshire next Tuesday. He's facing a tough challenge from John McCain who's been campaigning fiercely in New Hampshire. Remember McCain won in New Hampshire back in 2000.

Let's take a look at the Democrats, what happened tonight. Right now with 99 percent of the democratic precincts officially reporting, Barack Obama wins rather handily, 38 percent to John Edwards 30 percent, Hillary Clinton if this holds with that one percent still out there, 29 percent she would come in third. But remember, it's still a long way to go.

Just because Barack Obama won in Iowa doesn't necessarily mean he's going to win in New Hampshire and beyond. Let's keep all of this, all of this in proper perspective. In fact I want to go out to the Clinton headquarters right now, Candy Crowley is standing by, in fact we have reporters standing by at all of the respective Democratic headquarters.

But Candy, give us a little flavor of what happened tonight. We heard Hillary Clinton speak to her supporters, clearly subdued there as a result of her not winning in Iowa.

CANDY CROWLEY, CNN CORRESPONDENT: Absolutely. I mean listen, Wolf, here's what they, how they parsed this house before the votes began to come in. And that was if she wasn't going to win, she would rather lose to John Edwards, they didn't want to lose to Barack Obama because they think he has a bigger structure. Obviously he has the money to go on.

Instead it appears that she's now lost to them both, and pretty handily, I mean by nine points if these numbers hold up to Barack Obama. So no it is forward and they don't have much time to try to change their game plan. They're looking at this tonight and saying the message that comes out of Iowa is change.

Now she's been trying to pivot on this point for the past several months, saying, hey, we're all about change, all of us want change, here's the changes I wants in health care and the Iraq War, et cetera, but what we need for change is experience. It didn't work. They also counted on history, that there would be women, particularly the over 50 crowd who would come in and support her because of the history of perhaps having a woman in the White House. That didn't work. The last I heard from those entrance polls was that more women went for Barack Obama than for Hillary Clinton. So they have got to figure out a strategy here in five days to kind of turn this thing around.

Obviously a big part of their strategy in New Hampshire has been the roots that Bill Clinton has there. This is not going to be enough to push her forward and they know that and it's going to be a very rough, very intense five days, Wolf. BLITZER: Do you get a sense, Candy, because you've covered this for a while now, that her initial support for the war in Iraq really hurt her when the dust settled today?

CROWLEY: You know, you can't actually say that. I think it was a broader, a broader message that the Iowa voters were sending because she has remained competitive. Her position on the war was known very early on.

In general, it seems that a lot of these Iowa voters looked at this field in the Democratic side and said, there's not that much difference between them. She as you know, also pivoted from her previous war position when she supported the war and that original Iraq resolution, she has since then become partially critical of the war, has also become harshly critical of the way Iran was handled by President Bush.

So she's been able to kind of turn that away and Iraq sort of went down as an issue and the economy came up here at least over the past couple of months and really the Clinton campaign thought that would be a strong suit. That her experience there, that all of that would work. But I have to tell you that when you go to an Obama rally and you talk to the people afterwards, they come out and they say, boy, he is so inspirational. I have seen people moved to tears when he talks. And they come out and they just say he fills us with hope and he is so inspirational.

They come out of a Hillary Clinton event and they say, she's so smart. She knows a lot of stuff. Well clearly, inspirational, the future, turning the page at least in Iowa won the day.

BLITZER: And we certainly saw that come through in his remarks, Barack Obama just a little while ago. Candy thanks.

Jessica Yellin is over at Barack Obama's headquarters in Des Moines as well. I may have been a little subdued over at Clinton headquarters, it was really lively where you are, Jessica.

JESSICA YELLIN, CNN CORRESPONDENT: Not subdued here at all, Wolf. You can't exaggerate the enthusiasm that was in this room. I'll tell you, Barack Obama finished his comments about 20 minutes ago. But he is still here shaking hands, people swarming him.

Even before he arrived in the room, there were spontaneous cheers of people chanting his campaign slogan or his campaign chant, fired up, ready to go. There is so much enthusiasm among people saying I can't believe we did it. I can't believe it.

Barack Obama and his aides here are emphasizing a message that they pulled out this victory tonight by bringing together in their view independents, Republicans and Democrats. Barack Obama, one of his chief advisors, David Axelrod said it's part of their message for the future that there can be a new majority for the Democratic Party, that's about sort of healing the divides instead of driving people apart with wedge issues and you really heard that in Barack Obama's comments himself tonight, that this is about being a united America, the U.S. of A, I can tell you Obama seemed relaxed all day today. He started the day with a basketball game with some of these staff. He was out to dinner tonight, he wasn't even at a hotel watching returns, was out to dinner with his family when he heard that he had won or that it was called in his favor and they're not underestimating the challenge ahead. They say it's going to be a tough fight. They don't think this is the end.

But the bottom line, the idea, that he was able to win in this state is a huge boost for him, not just for the national momentum, but for all the doubters that somebody who looks and sounds like Barack Obama meaning that he's brand new to Washington and he's so different from the mold, the fact that he could win they think will encourage those doubters to think that he could actually win in November and really turn the numbers around in all the primaries to come. Wolf?

BLITZER: Jessica, have you heard earlier him today it looked like he was losing his voice a little bit, but it came back robustly in this speech that we just heard. He must be feeling a lot better I assume.

YELLIN: Yeah, they say he's feeling great, he's pumped up and he's emphasizing he doesn't think this is the end, this is the beginning, but obviously such a sense of joy from the campaign and I'll tell you, so many young people in this audience who are sort of saying, wow, I couldn't believe this could happen. And it worked. So the enthusiasm around him is infectious and you hear him in his speech tonight as so many people have said, one of his best speeches, he just seems to be hitting his stride right now, we'll if it lasts in the states to come.

BLITZER: Congratulations Barack Obama on a decisive win in the Iowa Democratic caucuses. Jessica, thank you, Joe Johns is over at John Edwards' campaign headquarters, it looks like he could come in second, Hillary Clinton coming in very narrowly third, but he says he's moving on. He's going on to New Hampshire, Joe.

JOE JOHNS, CNN CORRESPONDENT: Well, yeah, and the interesting thing, Wolf, if you look at this whole thing, this was supposed to be the make or break state of course for John Edwards. He was supposed to win or out. He didn't win and so now sort of the question is, well, what happens next? What are you going to do next and they're already talking about plan B. What happened here really, I think, throughout the day, everybody was pretty aware of the fact that if there was enormous turnout at these caucuses, new people coming into the system who haven't done it before, it's going to be real problems for him and it was going to inure to the benefit of Barack Obama.

That's pretty much what happens. So now we're talking about plan B, plan B for this campaign some old handlers, David Bonior, the former congressman from Michigan, we have Joe Trippi as a chief strategist, a very longtime hand in Washington, DC. They're already looking for the future, sort of turning seamlessly to what we do now. What they're looking for, hopefully they say is a good, strong showing in New Hampshire after that, hopefully a breakout state for this campaign, either in Nevada or perhaps South Carolina. If we have a soundbite, we can throw it just to hear a little bit of what John Edwards himself said here today.

(BEGIN VIDEO CLIP)

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: The one thing that's clear from the results in Iowa tonight is the status quo lost and change won.

(END VIDEO CLIP)

JOHNS: So the story here again is the overwhelming turnout at the caucuses, really sort of buried John Edwards and pretty much Hillary Clinton as well. Now they're neck and neck as you see right there in those numbers that we have been looking at all evening. This campaign is trying to say, this whole thing just shows that Hillary Clinton was rejected, but still the numbers are quite close, Wolf.

BLITZER: Very close for second and third place. The big disadvantage that John Edwards has going into New Hampshire is money. Obama and Clinton, they have a ton of money still. He doesn't necessarily have much money, although I must say Mike Huckabee's win in Iowa shows that money is not necessarily everything nowadays.

JOHNS: That's true and he spent what he could spend here on advertising and still couldn't keep pace with Hillary Clinton or Barack Obama.

Nonetheless, they're not saying they're going to win in New Hampshire, all they want to do is try to pull out a respectable showing using that same message they have been pushing here in Iowa. They feel they did OK with it. Then they want to look to South Carolina, perhaps, if they can get there, look to Nevada, see what they can do there. South Carolina certainly because that of course is the state he was born in.

BLITZER: Joe Johns, thanks very much and Candy and Jessica as well. Let's take a look at the Republican side. Dana Bash is covering the headquarters of Mike Huckabee. He's the big winner tonight, the former governor of Arkansas, decisively beating Mitt Romney in Iowa. I see that I like Mike poster behind you. A very, very enthusiastic address he gave tonight, very passionate.

DANA BASH, CNN CORRESPONDENT: Very passionate and, you know, Wolf, the theme he gave tonight was something that we heard sort of in the closing days of his stump speech over and over again here in Iowa. And what he said tonight is the election is not about me, it's about we. He really is trying to make this -- he's got a populist pitch, something very unusual for a Republican. So he is trying to make that here and extend that as you imagine, beyond Iowa.

However the reality is we know this just have being with him at rally after rally, event after event. A large portion of his support here in Iowa were evangelicals. We know that about 60 percent of the caucus-goers were evangelicals. He got the vast majority of them. Huckabee advisors here admit full well in private that that is something they're going to have to expand beyond in the coming days, in the coming weeks in the contest ahead. The interesting thing is, even though that doesn't necessarily play as well for him in the very next state of New Hampshire, as everybody has been discussing tonight, we're told he's going to actually spend the next five days until the primary on January 8th in the State of New Hampshire. He's still going to work it there. Despite the fact that the very next contest in South Carolina that is much more fertile ground for Mike Huckabee, Wolf. That is another place where it has a very large evangelical base.

The former governor of South Carolina David Beasley is here. I was just talking to him. He has been traveling with him and sort of just trying to help Mike Huckabee continue that momentum in that particular state. One thing interesting note They understand in the Huckabee campaign that he is going to have to have more specific policy positions, and they're working on that already as we speak. Trying to come up with more specific ideas of what he would do as president. He's talked a lot about his ideas, about his authenticity, about optimism, but they know they have to put more meat on the bones.

BLITZER: Dana Bash over at Huckabee headquarters in Des Moines. Thanks to Dana very much. I want to check in with Larry King, he's got a very special program coming up at the top of the hour, you have got some major guests, Larry, give our viewers in the United States and around the world a sense of what you're up to.

LARRY KING, CNN HOST: First, Wolf, first order of business, I want to thank you for sitting in on LARRY KING LIVE as the very able host last week during all that crisis in Pakistan. You were superb.

BLITZER: Thank you, Larry. It's my pleasure.

KING: We have a big show coming up as you said. We had Mike Huckabee, John Edwards, Rudy Giuliani and more.

We'll also be joined by Bob Woodward for his analysis. As well as CNN's David Gergen. The best political team on TV including Wolf Blitzer, that's LARRY KING LIVE, a special live midnight show at 9:00 in the Pacific area. You'll not want to miss it.

BLITZER: We're going to want to watch. You have got some good guests as usual. And only Larry King can do it. Larry, stand by, we're coming to you in a few moments. In the meantime, I want to go to Jeff Toobin.

Because he's looking at the numbers closer and closer. You're drilling in getting a better appreciation of what happened. But also look ahead and show us what's next on the agenda.

JEFFREY TOOBIN, CNN ANALYST: I mean, Wolf, in American history, there has never been anything like the next four and half weeks. The next four and a half weeks are going to be extraordinary. Look at what's ahead. This Saturday, we have the Wyoming caucuses, just for the Republican, that's what the red star means. Then, of course, next Tuesday, the Democrats and Republicans, the New Hampshire primary. A week later, the Michigan primary. And here's where things get a little tricky. The Republicans are voting for real in the Michigan primary and all the Democrats will be on the ballot but none of their votes will count under the Democratic National Committee rules.

At the end of the week on the 19th, South Carolina Republican primary, Nevada caucuses for the Democrats. Then a week after that, the Democratic primary in South Carolina. It's going to be enormous.

Jan 29th, Florida primary, again like Michigan, it's going to be just for the Republicans to count, the Democrats will vote, but, again, their votes will not count towards the convention. Then February 3, the three-day main caucuses end, and then a day like will never have happened in American history. February 3, super duper Tuesday.

And look at the states that are going to vote for Super Tuesday. New York, New Jersey, Georgia, California, most of the delegates will be decided, will be allocated by the end of February 5. It is the biggest primary day in American history and it's coming up in four and a half weeks and the candidates, they have been used to just campaigning in one or two states, they're going to have go all over the country in just a few weeks.

BLITZER: And we're going to be watching every single step of the way, it's a sprint now to February 5th, Super Duper Tuesday. Jeff Toobin will be with us for all of this as well. He's part of the best political team on television. So is Tom Foreman. We'll take a quick break. When we come back we'll go back to Des Moines. Tom has been with those caucuses all night. You're going to want to hear what he has to say. We're going to take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Barack Obama has won the Democratic caucuses in Iowa tonight. But who has come in second? We are now ready to report that John Edwards, John Edwards will come in second in Iowa. Hillary Clinton coming in third. Look at this. With 100 percent of the Democratic precincts now officially reporting, Barack Obama has 38 percent, John Edwards 30 percent, Hillary Clinton 29 percent. Hillary Clinton comes in a disappointing third in Iowa.

Tonight let's take a look at the Republican side with 87 percent of the Republican precincts reporting. Mike Huckabee is the winner with 34 percent, Mitt Romney comes in second with 26 percent.

But there's a battle underway still for third place between John McCain and Fred Thompson. Both of them so far have 13 percent. We'll let you know as we know who comes in third among the Republicans in Iowa. Tom Foreman has been watching all of this, together with the best political team in television. He's out in Iowa right now. And you've been at those caucuses, it was packed earlier when we spoke, Tom, but right now it's you basically. You're there with a bunch of chairs.

TOM FOREMAN, CNN CORRESPONDENT: Well, this was full of Republicans in here, you move out into the hallway here, there are Democrats absolutely everywhere, they had three caucuses going on right now. There's nothing really going on except for the cleanup as they mop up the halls and get rid of everything that's left here. But I've got to tell you this, Wolf, if there's one thing you have to know more than anything else about what happened from the caucus-goers, when I talked to them tonight, on the Republican side, there were a lot of caucus-goers who came in here among the Huckabee supporter who is really believed in their guy but didn't know if this threshold of possibility could be reached with a lot of other people. They left here shocked to find out that it was true and in this very room, the Clinton supporters were right in the middle over there and when they came in to this caucus today, they were very fired up, they were enthusiastic and excited and partway through, even before we knew the numbers, I came around the corner here at one point and I looked over and you could see the group just visibly sag and at that moment, I thought, something is happening to them in this room that is not a good thing.

And by the time it was done, the Obama supporters on the other side were absolutely dancing in their seats. The folks over here who didn't quite get the play they wanted to were disappointed. But the Clinton folks were really crushed. More than anything else, as I said, I guess what you have to know from the caucus goers as they filed out tonight is the Huckabee supporters and the Obama supporters alike walked out of here convinced that the thing they believed in actually has a possibility of being believed in by an awful lot of Americans and that's a very important threshold. It's maybe something you can't even count in the numbers, but boy they went home with that feeling tonight, Wolf and they cold told me so. They feel like this has really invigorated the entire race for them. And they hope for a lot of Americans.

BLITZER: Tom Foreman at the Merrill Middle School where there were four caucuses, separate caucuses tonight. Thanks very much, Tom, for that. Abby Tatton has been watching all of this online. Abby, what have you seen?

ABBY TATTON, CNN CORRESPONDENT: Wolf, at cnnpolitics.com we've watched all this reporting, all the results coming in right here and you can look at how it all went down county by county with almost all in there, 99 percent reporting for the Democrats, 86 percent for the Republicans. There are entrance polls as well that you can get online and we have also been asking people this evening out in Iowa to send in their I-Reports as they were out in these caucus precincts.

And what we've been hearing, this is Mediapolis in Iowa, Pleasant Hill and Iowa City, all these three Democratic caucuses tonight and all those I-Reporters telling us what a huge turnout they had, packed halls all over. Wolf?

BLITZER: Abby, thank you.

Anderson Cooper has been watching all of this with the best political team on television. Anderson, we're getting ready for LARRY KING LIVE but give our viewers a sense of what's happened.

ANDERSON COOPER, CNN HOST: I want to talk to Suzanne Malveaux, White House correspondent about where Barack Obama goes now in New Hampshire, what happens? SUZANNE MALVEAUX, CNN CORRESPONDENT: Campaign manager says the message stays the same, but they focus on independent men as well as Republican women and essentially they do the same thing, he told me two days ago that is to show the voters he's willing to challenge the status quo even if its uncomfortable and they can do the same.

COOPER: Chief national correspondent John King. You say New Hampshire now a very different place than it was yesterday.

JOHN KING, CNN CORRESPONDENT: It's a very different state than Iowa is.

So you have a Republican race with a new front-runner, a surprise candidate in Mike Huckabee. What do the Republicans in New Hampshire, it's a much more libertarian state. A much more liberal to moderate state and remember, it's a primary not a caucus. So you get a much bigger group of people. Still a relatively small state, New Hampshire, but with a bigger audience for a big election in five days.

COOPER: Gloria Borger, for you turnout key tonight?

GLORIA BORGER, CNN POLITICAL ANALYST: Key, and stepping back we can see what this means for the rest of the election year, if you look at the turnout, the Democrats actually had almost twice the amount of turnout as the Republicans had. The Democratic Party is energized. But on both sides the turnout was up. On the Democratic side turnout was 227,000 people which was almost double what it was in with 2004.

COOPER: David Gergen, about 30 seconds left.

DAVID GERGEN, CNN POLITICAL ANALYST: The Republican turnout was up modestly. The Democratic turnout exploded. That really is trouble for the Republicans and already tonight, club for growth, economic conservatives are attacking Mike Huckabee saying he's unacceptable for the party. So there's going to be a fracas on the Republican side.

COOPER: It's a whole different race. Our election coverage continues right now with LARRY KING LIVE. Larry, take it away.

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